Folksy Ltd

Trend in delaying payments to suppliers


(Ronald Koorm) #1

There seem to be more cases where some firms are holding their suppliers to ransom and demanding ever increasing time periods for payment of goods received from suppliers.
One food store wants 120 days as standard and wants 3% discount if paying within 90 days !
Many smaller and medium sized suppliers are being affected by this sort of thing, and also pay the other party a supplier fee to have the contract for supplying them.

Are there any of you out there who have been cajoled in onerous terms where you supply your goods, eg to a wholesaler or retailer ?

Also, you may wish to see the info published by the Government on late payment regulations for commercial businesses. Note these are not relevant when your individual customer is late is paying, it is relevant to supply chain contracts and similar.

It shows the compensation and interest you are entitled to under the law for commercial debts.

If your customer is late in paying something you have supplied, you have English standard contract law to apply, and ultimately writing threatening letters, and the small claims court.


(Eileens Craft Studio) #2

I remember a certain very large company tried to pull the oh we only pay invoices at 90days when I worked for a large company in the accounts office. But it didn’t work as I pulled out their contract that said invoice total had to be paid 30days from invoice date with the details of the late payment penalties and the fact they only had credit up to a certain amount. I then pointed out their account was on hold as they’d reached that agreed amount and we were unable to fulfill any further orders until they paid up their account bill.

You can image they paid up later that day.

Companies should always make sure they have their contracts signed to avoid this.

In many countries the ‘Sweetner’ payments’ are regards as fraud and are illegal. Sweetner payments are where a supplier pays to have a contract to supply goods or service to a buyer.


(Sonia Adam) #3

I used to supply a small gift shop that would regularly ‘forget’ to send payment or spin me the line that ‘times are hard’ so I’d spend a lot of time chasing my money. One if the reasons I stopped supplying them.


(Heather De Gruyther) #4

I have one shop that really pushes paying invoices to the limit - to be fair they do always pay though. My husband is a freelance writer and he is ALWAYS chasing up money. They ‘miss’ him off the payment run at month end and then he has to wait another month before they’ll do anything about it - and occasionally they’ve missed him AGAIN! Even writers need to eat occasionally :wink:


(Ronald Koorm) #5

I believe what you describe is quite common, unfortunately. I used to work for a medium-sized firm that had Royal Mail as a key client. Royal Mail kept slipping payment dates and I think they assumed more than 30 days and even then 60 days or more overdue was OK.
Once it got so bad, I had to rush across town to another client, to get a cheque for some work I had just done, so the firm could afford to pay all the staff that month. The firm came close to going under on more than one occasion.
If you regularly work for a key client, they will often take advantage of you with your invoice payments. If you wave the big stick at them, they may decide to go elsewhere, and you lose the business.
If you work in the private sector, there is always the risk of slow, or non-payment.